Book Value of a Business (3x EBITADA)
You’ve probably heard the common rule of thumb: a business is worth roughly 3 times its EBITADA (Earnings Before Interest, Taxes, Appreciation, Depreciation, and Amortization). While this provides a quick snapshot, it often leaves significant value on the table.
The Problem with traditional book value:
Traditional valuation methods with businesses valued under 5 million, focus primarily on financial ways like EBIT or EBITADA and overlook the crucial intangible assets that drive a business’s true worth.
Think about it:
Brand reputation: How much is a loyal customer base worth?
Customer relationships: What’s the value of strong, lasting client connections?
Intellectual property: Does your business possess unique patents or proprietary processes?
Operational efficiency: Are your systems streamlined for maximum productivity?
These named “intangible value pillars” and more are the real engines of growth, and they’re often missed by standard financial analysis.
Growth Concepts: A New Approach:
At Growth Concepts, we go beyond the surface. We believe in uncovering the maximum potential value of your business and documenting it so a potential buyer, loan officer or investor could realize what you have.
Here’s how:
The “14 Immutable Laws of Business Value”: Our approach is rooted in proven principles that guide us in identifying and quantifying intangible assets.
Analyzer II 3.0: Our proprietary machine learning tool analyzes hundreds of thousands of business model variations, revealing hidden value drivers that traditional methods miss.
Intangible Value Assessment: We meticulously evaluate and quantify the intangible assets that contribute to your business’s overall worth and document these intangibles.
What This Means for You:
Instead of a generic 3x EBITADA valuation, we provide a comprehensive assessment that reveals the true value of your business. We help you understand and could leverage the intangible assets that drive growth and maximize your return. Typically our customers receive a 3 to 5 times increase in discretionary cash.
Stop leaving value on the table. Discover the hidden potential of your business with Growth Concepts.